Middle-class voters across the country are legitimately anxious. Tens of thousands of workers have lost their health insurance, while wages have barely risen. But blaming Nafta or any trade agreement only feeds misguided protectionist sentiments at home and strains already difficult relations around the world.
It is also factually inaccurate. In a review in 2003, the Congressional Budget Office concluded that Nafta had slightly increased growth in the United States and that any disruptive effects on employment were small. Trade opens foreign markets for American producers and gives consumers more choices, while competition spurs productivity growth at home.
If the candidates are not careful they will quickly pen themselves into dubious policy positions that they would have to follow, or flip-flop on, once elected.

Hillary is pledging that she will insist on regulations in all trade agreements if she is President. All countries the U. S. trades with will have to conform to American standards in safety and labor and the environment. No poisonous junk from China, no endless flow of illegal labor that robs Americans of jobs, no moving operations to another country to avoid pollution control or avoid fair labor practices.

These stipulations would have been included in the original NAFTA but the Republicans wouldn't support it this way. Younger people don't know the hurdles Bill Clinton confronted in his administrations and older people are forgetting.

Liberal idea if you look at the definition of Liberalism in economics. What most people do not understand is that the evil lies in the implementation of ideas not necessarily in the ideas themselves. NAFTA if accompanied by the appropriate checks and balances would help improve the economy of all 3 Nations compromising the North American Continent. It is like representative government is a good idea as long as the check and balances exist.

NAFTA allowed corn from the megafarm corps in the U.S. to flood into Mexico, thereby undercutting little farms there. So where do you think those starving Mexican farmers went?

They come to America to work illegally, where they have no rights because of their illegal status, thus undercutting American workers. Meanwhile, thanks to other suck trade agreements, lots of manufacturing jobs go to factories overseas where guys with machine guns march down the aisles to make sure no one gets rowdy. And there aren't many trade unions under those conditions either.

The fact that all this happened was no surprise to me. I wrote about it in 1992 for my union paper, saying what was going to happen. And yes, it's not about ideas but implementation. And guess who lived in the White House when it was implemented?

and Mexican small farms. Trade barriers on US corn weren't completely lifted until January of this year. Corn prices had been historically down for years prior to NAFTA and haven't changed appreciably over the years until about 2 years ago. Mexico's been going through the same shortsighted transition to large industrialized farm systems that have taken over the small farms in the US, and its likewise negatively impacting small farmers there.

What's happening in Mexico in the past two years and right now is that US ethanol production is raising the price of corn to levels that are a boon to non-subsistence corn farmers in Mexico (only about 40% of all corn farmers) but are a hardship to all Mexican consumers (tortilla prices are sky high) and to Mexican livestock growers who have to buy feed corn.

Ethanol production from corn is a big problem. It doesn't solve the energy equation because it takes as much oil to produce ethanol as ethanol saves in convention fuel usage, and it negatively affects consumers of corn, by raising the price of all corn foodstuffs, for no positive gain in energy independence. And that has nothing to do with NAFTA.

constantly gets tied to NAFTA, it is a big talking point. However, what I notice is that most jobs are being lost to China and India. These are not parts of NAFTA. The ports here in LA have a constant stream of container ships arriving from Asia. Sometimes they look like a train coming in there are so many.

My own take is that there are a number of factors causing the situation. One is a consistent failure of US management to keep up with changing consumer demand. The auto industry ceded the low end of the market to the Japanese in the 70's. The profit margin on high end cars was good, while the low end was not worth fooling around with. This was a fatal error, it allowed new brand names in autos.

Can see the same path in other industries. Cede the low end, eventually face competition on the high end. Shoes are an example. First the flood of inexpensive product. Then the arrival of top of the line Euro brands.

Part of the understanding of the free trade agreements is that currencies will not be manipulated. The Chinese keep theirs artificially low, and the dollar high, to expand exports. This is a major part of the problem.

Perot missed the direction from which the sucking sound came. There have been plenty of trade agreements to open the doors to China and elsewhere. NAFTA was just the first in bunch around then.

But NAFTA ruined a lot of little farms in Mexico, which accelerated the illegal immigration into the US. That's why you can both hear the sucking sound of our jobs disappearing and see the lines of unemployed and mostly illegal immigrants lined outside Home Depot looking for work.

Actually, the problem isn't which country benefits. It's who benefits. The oligarchy in Mexico benefits, the oligarchy in the US benefits.

That was utterly predictable if you didn't believe Bush/Clinton/Gore on the subject back in 1992.

illegal immigration statistics one does NOT find a massive influx of illegal immigration that can be tied to NAFTA. iow, there was fluctuating but significant illegal immigration before as well as after NAFTA's enactment.

This can be understood as many of those workers displaced from farms due to, for example, US corn imports to Mexico then got (better, perhaps?) jobs in, for example, the rapidly burgeoning (due to NAFTA) Mexican manufacturing industries.

I'm not opposed to trade, at all, but I think our trade deals have been structured very, very poorly. I'm less interested in squeezing out every bit of productivity and GDP, and more interested in how it's worked out in terms of income inequality. NAFTA and other such deals have built the wealth of the top hugely, IMO, but really haven't filtered down to helping people below, and instead have only increased downward pressure on wages at lower skill jobs (and increasingly this is true of more skilled work as well).

People can't be expected to totally retrain every couple of years as whole industries offshore. Top line economic efficiency doesn't consider impacts on particular groups of people, but those are important to me, too -- I don't just want economic growth in general, I want well balanced growth. GDP strikes me overall as a very poor indicator of overall economic health, given that it doesn't catch vast inequalities there.

And I have a hard time liking any argument that analyzes us primarily as consumers -- seems to me that wages haven't kept up with inflation, so sure, people can buy cheap plastic stuff, but they still earn less in real terms. Frankly, if it weren't for the ever cheaper plastic stuff, the working class would've been toast a while ago in these conditions, but that's a feedback loop. My standard is a little higher than "can they buy plastic lawn chairs and particleboard furniture". They're not able to meaningfully save or invest in much of anything for longer term economic health -- that's a real problem.

I do think that's about vastly more than NAFTA, though, which has become sort of representative in many people's minds of much of our trade in general.

I know we're not really ever going to see eye to eye on this one, though. It's just my copper coinage.

I'm a retailer and not a big one. Whenever I can I will sell American made as long as the quality and demand is there. But, due to the nature of my products I have to buy products from Europe and other foreign countries I am not in the low end consumer prices market. The higher the Tariff the higher my price since now a days consumers can buy Globally they will go retailers who have lees costs to them. I makes harder for me and makes my marketing expenses that much higher.

retailers and many other business people are to a large degree caught in the middle of all this, IMO. Of course being competitive, in terms of price, requires considering the costs of global goods at this point. But IMO a lot of this is why we need to consider labor power and other factors in the countries with whom we have "free" trade deals. There's no easy solution to that, but the downward wage pressure at the lower ends of the spectrum have a lot to do with companies feeling forced to outsource to places with extremely low wages in order to stay competitive price-wise. The irony in NAFTA is that companies that had moved to Mexico are now moving to China, because wages are lower there.

Most of Europe has reasonable or improving wages, labor standards, and environmental controls, and most European products IMO are not so vastly cheaper than American made goods as to destroy American companies' ability to compete on price to some degree. My issue isn't that people "buy American", it's that there's no way for American workers or the companies that employ them to be able to compete with those in countries with excessively low wages, virtually no labor standards, and/or virtually no environmental controls.

As for the story for you, I don't pretend at all that you're to blame for the situation. Any solution has to come in the whole system, and until that happens, retailers are trapped.

When I worked in California for a large engineering/mfg company, we had many plants in Mexico and Europe. Ireland was giving grants out then. Then they moved the plants to China, Philippines, and Indonesia because the product was labor intensive and they needed cheap labor. This was BEFORE NAFTA. And one of their parts is in every PC. The company build dorms in those places for workers. You might say why didn't they just pay more to have the plants here. Don't know. Maybe taxes or labor costs but it was just cheaper to produce their product somewhere else. This is a large US Corporation. In this case, Mexico lost the mfg to Asia. China's favorite nation status was always what they were concerned. If lost, then they would have to move the plants again. People blame NAFTA but I suspect that NAFTA was only a small part of the whole outsourcing which was all over labor and mfg costs. It was really all about the bottom line for most companies.

for all that is wrong economically. It's much more complex than a trade agreement, although a few things might be helped with environmental/labor standards in said agreements. If noting else, life would be a lot better south of the border in the mfg areas. Greed is a bigger problem and that's where the labor/mfg costs argement come into play.

But what was clear for the trade agreements in the last three decades is that the purpose has been to transfer manufacturing abroad to eliminate unionized jobs here in the U.S.

The middle class was built on unionized factory jobs. As they have disappeared so has the power of the average American. That's partly why we are in the mess we are in today. No money, no power. No power, no money.

any disruptive effects on employment were small. Trade opens foreign markets for American producers and gives consumers more choices, while competition spurs productivity growth at home.

The errors inherent in this are:

"any disruptive effects on employment were small."

Maybe to the macroeconomist that's true because total employment might not decline, but try telling that to the individual guy who's out of work. Any job a former industrial worker might get to replace the one which went offshore - to Mexico, China or anywhere else - will almost surely pay less.

"Trade opens foreign markets for American producers"

Well, in a country where 9 percent of the jobs in 2005 were in manufacturing, as opposed to 39 percent in 1995 and 59 percent in 1965, one needs to look closely at the term "american producers". Are those producers actually producing in America, or are they just slapping an American company's brand name label on a product made whereever? While trade might open markets for any product bearing an American brand label, the benefits of that will certainly flow to the management and ownership of the company whose brand it is. Less certain that there are any American workers there to get the work actually making the product.

"and gives consumers more choices,"

A lot of other people have discussed the plastic chairs and particleboard furniture, and plastic crap made in China which constitute most of the "enhanced range of choices".

"while competition spurs productivity growth at home."

There are three problems with this.
(1) No matter how productive an American worker might be, his/her wage scale is almost always higher than any non-American worker (with the possible exception of a few Euro-zone countries). In such an environment, the cost-per-unit (dollars per hour divided by units per hour) of the American worker will always be higher. If the foreign worker is paid $20k/year - about $10/hour (a kingly salary in most countries) - and produces only 3/4 as much as an American, it will still be cheaper to ship the manufacturing offshore for all American jobs paying more than $13.33/hour. If the foreign worker is paid something closer to the foreign reality, say $1/hour, and is only 1/10 as productive as an American, it is still cheaper to offshore all jobs paying more than $10/hour. The biggest cost factor becomes shipping, not labor.
You then wind up with NYC sewer and electrical manhole covers being made in foundries in India, where the workers run around barefoot in loincloths pouring steel by hand, rather than those same products being made in an American steel foundry (to the extent such still exist) within a day's truck drive of NYC.
Go look at the pictures. I personally have poured iron working in an American foundry one summer in college and protected by American safety standards. It was and still is the hottest, nastiest, suck-iest job I can imagine and quite dangerous every minute. I cannot imagine doing it the way these men do.
(2) There is a point of diminishing returns in productivity improvement. One can only work so fast. Installing mproved machines to do the work faster only makes sense so long as there is a market for all the products that will be produced - it makes no sense to install a widget-maker that will make more and faster, if the market can only accept a certain number of widgets.
(3) Productivity improvement is know-how which can easily be transferred to the low-wage offshore countries. Once it is transferred, the advantage the American worker might have had, is gone.

Finally, because NAFTA and the WTO have set up secret "court" systems for resolving disputes, whose proceedings and results are not open to public inspection, there is no way of knowing just whether the economic arguments the pro-trade people make are true, false, or somewhere in between.

Something I read a couple of months ago adds an interesting component to this debate. It was that basically the soaring cost of health insurance is one of the big reasons that it costs more for American workers than foreign workers. This is why some auto plants have moved to Canada, where there is Universal Health Insurance. The employers don't have to pay such a large bite per worker for their health insurance. This is just another reason why I think that if the health care mess is ever fixed, it will also save a lot of American jobs and even create new ones.

health insurance costs are a sizable part of our economic problems, IMO. It's not just about individuals getting health care, though that's certainly important, but it's become a huge additional cost of labor here that winds up keeping companies from being able to raise monetary wages, and keeps unions having a hard time fighting for them. Health care has become a gigantic economic issue IMO, even apart from just the outright uninsured.

Which is one of the reasons I wish it were getting a lot more attention in this primary.

I love this blog because the folks here actually think for themselves and look beyond campaign talking points. Most of the comments that I would have made have been already made.

NAFTA is not responsible for the serious decline in American manufacturing. Off-shoring of industrial capacity is. Textile manufacturing went to the Caribbean, Central America and South Asia. Electronics to Taiwan, Malaysia, Korea, and now China. Heavy industry the world over but primarily East Asia. And now seemingly safe clerical, customer service and professional jobs to India. When I worked on Wall Street we started outsourcing basic accounting to India.

The point on the effect on our free trade partners is one missed by most observers. NAFTA decimated Mexican agriculture and that led to the immigration issues we now face. Furthermore, we have "liberalized" agriculture in the US. Avocados, for example, can only be imported as pulp, no whole fruit. That protects about 13,000 US farmers who are on paper all millionaires. Sugar and cotton are two other protected crops. People should more attention to the Farm Bill.

The other corollary argument advanced by Phyllis Schafly is that NAFTA will lead to a North American Union and an erosion of sovereignty.

The political leadership should approach discussing NAFTA as Europeans approach the EU common market. Instead, NAFTA and free-trade is villified. And isn't odd that is Mexico that is castigated when Canada too is a partner. Those attacks on poor Mexico strike me as bordering as racist.

Offshoring seems connected to the capital cycle. As productive assets age, they need to be replaced. Offshoring began when the postwar factories were approaching replacement age. Companies in the market for new facilitites began to notice opportunities overseas.

One of the things that NAFTA supporters never adequately explain is where and who is this "we" who allegedly benefits so much from these trade agreements. If anyone can look back at the past few decades' worth of trade agreements and see anything but increasing concentration of wealth in the absolute upper echelons of American society, then please show me. The contention that the there is some great popular mass of people out benefitting from these agreements is simply implausible. The consumer may get cheaper goods at Walmart, but they get the low-paying, no-benefit jobs that go with it and the hollowed-out communities that suffer in the wake of the destruction of local retail and jobs by the job-offshoring, big box retail regime.

BTD. As an economist it always frustrates me to see how people misunderstand the idea of free trade. Almost every self-respecting economist (including Krugman who perhaps one day will get a Nobel prize for his work in the area of International Economics, and Joe Stiglitz --the most influential economist of our time, a Nobel pprize winner, Chair of Council of Economic Adviser) supported NAFTA. NAFTA was not supposed to be a job creating program for USA. It was supposed to enhance productivity. It created job reallocation between sectors. And finally much of the trade between Mexico, Canada and USA were already "free". The capital movement due to NAFTA is inevitable because you cannot have free trade going in only one direction. Yes there are are some enforcement issues and they can be fixed. There is too much hupe about NAFTA.

Some of the brightest minds on the planet are looking at economically sustainable models that do not constantly equate growth as the only viable model for an economy. Unless and until we can go into space, we have a finite amount of resources on this tiny ball of a planet we call home, and if we don't change our way of thinking we're in for a world of hurt.

BTW....We also joined the WTO in 1995.

There are no mechanisms to ensure democracy in EVERY SINGLE international institution to which we belong that I am aware, and except for the UN, none of them deal in human rights either. Furthermore, the UN puts countries like Libya or China on the human rights council.

We need to belong to international organizations that function on democratic principles and recognize human rights.

Look, free trade is a ruse, everything like it is. Money has no value except in people's belief that is has value. Your average American worker, and rightly so, does not find it a boon that their job is outsourced for a third (if not lower) of their wage.

Money is not a living thing. It is not a seed, you can't plant it and grow something. It is not a cow, you can't milk it. But the entire notion of free-trade is predicated on the idea that money, like the migrating birds, will somehow magically spread itself around if those who control it are just allowed to more freely invest/exploit/divide&conquer with it abroad.

I don't buy the studies done, the research on the effects, because you can't quantify some of the most damaging aspects of NAFTA -- the psychological ones. What does it say to those manufacturing workers in the US that we think they are so unworthy of a job, of dignity, of their work translating into a secure base of citizenship? It says "F*ck you, we don't care, profit is everthing."

That is the problem with NAFTA -- it forces those without a choice to play a game in which they automatically lose.

...so don't try to tell me manufacturing and labor hasn't been hurt by NAFTA or anything else. We don't make sh*t, we just spend and spend and spend this imaginary thing whose existence and ultimate implications we haven't pondered for a vital second.

restoring Lochner-era property rights for investors and corporations at the expense of citizens being able to regulate locally in their own public interest, making it impossible (or at least punitively expensive) to protect the environment and manage local natural resources? Okaaaay...

it's good to know you don't approve of it. Even if you can't say why you think it's not happening.

Latest case: Nova Scotia rejects US corporation's plan to build quarry in scenic rural community and is now hit by $188 million suit for damages. Local and regional governments are apparently not supposed to be able to consider "community core values" like protection of the environment and local health and socio-economic conditions when deciding whether to permit such projects or not. The decision as to whether taxpayer dollars will be paid out if those "investor rights" are judged to have been violated or not will be made by a NAFTA tribunal with no public input or observation.

If you're a significant shareholder I'm sure none of this really matters, after all money is not geographical and the chapter 11 provisions are a Godsend to the real investor class.

But the salient facts are that NAFTA and like trade pacts have cost Americans good paying manufacturing jobs as well as weakened the nation by reducing its ability to make things.

To call NAFTA and similar agreements perfectly OK we would have to completely ignore the massive unhealthy balance of trade deficits that we're lugging around. Much of this deficit is from loss of manufacturing base and has turned us into a debtor nation.

We are increasing our export of commodities and our only gains in manufacture export are in comparison to the very recent past and due to a very weak dollar.

We are, in short, behaving like a third world nation while eagerly destroying our own communities and in so doing tearing apart the nation's social fabric.

The Times' support of free trade is every bit as irrational, silly, ill informed and dishonest as the Washington Post's support for the invasion of Iraq.

In fact, the arguments they're now using sound all too much like the arguments used to sell NAFTA in the early 90s.

As Larry Speakes said; 'if you tell a lie six times it becomes fact.'

Interesting that the Times recycles those tired old arguments at this time.

"What happened to NAFTA I think was we inherited an agreement that we didn't get everything we should have got out of it in my opinion. I think the NAFTA agreement was flawed. The problem is we have to go back and figure out how we are going to fix that. [Working Families Party, 3/26/00]"

Seriously, Clinton just needs to say that when Barack Obama ran for the Senate, he was to the right of Alan Keyes on the issue of trade:

"'Keyes said he is not fond of the
WTO' or NAFTA. Obama said the U.S. benefits enormously from exports under the WTO and NAFTA."

That is from an AP article in 2004. There most be more there for oppo-researchers. He does not express opposition, in the AFL-CIO sense, as much as a desire to retool.

His tactical style on NAFTA, like other policies, is to take a nuanced position by both candidates, and pivot into a black and white dichotomies to make it appear that he is and always has opposed to NAFTA while Cinton is and always has been in favor of NAFTA. In truth, like Clinton, he just wants to tinker with NAFTA

part of the problem. In the 50's to help Japan rebuild and be a bulwark against Communism, the US government let almost the entire American china, glass and pottery industry go under. In the early 50's, most ordinary Americans used US made china and glassware. By the early 70's, there remained only a few, mainly high end, producers. Deindustrialization began with the Cold War. It only became noticable when NAFTA came along.